TURNING TIDE?

South Africa: Bonds, equities poised to gain from US downside risks

By Xolisa Phillip, in Johannesburg

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Posted on January 27, 2023 11:49

Security officers walk past the Johannesburg Stock Exchange (JSE) in Sandton, South Africa, March 30, 2020. REUTERS/Siphiwe Sibeko

Renewed investor appetite for risk and yield, coupled with a cooldown on US assets, could benefit South Africa, a proxy for emerging markets, Bank of America Global Research experts say.

The US, where investors have been overweight because of the dollar’s safe haven status, faces headwinds ahead. These include heightened prospects of the American economy entering into a recession and a weakening currency, which will likely rebalance flows in favour of emerging markets.

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